1# Parabolic and Volume Trading System

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The
Parabolic Time/Price System is another idea
that Welles Wilder introduced in his book New Concepts in Technical Trading Systems. Parabolic was designed as a stop-and-reverse system, which means that a trader using Parabolic would always have either a long
or short position in the market. When Parabolic generates a buy signal, for example, a rising series of dots appears below current prices. As the market moves higher, the dots rise also, first
slowly and then more rapidly. When the trend stalls or begins to reverse, the dots and prices meet, the long position is closed out, and a new short position is initiated. For this system, we
wanted to find out if adding a volume requirement toParabolic entries would improve
Parabolic's performance. Our setup to buy is a high reaching the Parabolic dot above the market with volume greater than a five-bar simple moving average of volume.
Both conditions must be true on the same bar.